Policy supported technology-led intensification of agriculture has led to significant increases in agricultural productivity and food supplies in India. However, of late its negative externalities to natural resources, especially groundwater in semi-arid north-western region comprising the states of Punjab, Haryana and Rajasthan have become visible. Recognizing this, Punjab and Haryana brought out almost an identical groundwater regulation in 2009 which aligned sowing of water-guzzling paddy crop towards onset of the monsoon to prevent falling groundwater level. This paper reveals reveal that overextraction of groundwater continued even the regulation being in force. This perverse outcome could be due policy offsets such as highly subsidized electric power for irrigation, excessive procurement of paddy at minimum support price, stagnation in investment in major and medium irrigation schemes, and lack of incentives for crop diversification and adoption of water-saving technologies. It suggests a holistic approach for groundwater management, encompassing policies, technologies, incentives, institutions, and regulations. I am sure that policymakers will take due cognizance of this while designing a framework for groundwater governance.